KUALA LUMPUR (April 8): KPMG International Cooperative’s Malaysia member firm KPMG PLT (KPMG Malaysia) said today that having cash on hand makes a difference for small businesses in the country, as the ripple effects of the Covid-19 pandemic unfolds on a global scale.

In a statement today, KPMG Malaysia said it is unlikely for the true impact of this pandemic to be measured, until the situation stabilises. 

"Until such time, businesses both big and small are challenged to manage their cash flow position as their first line of defence. Left unmanaged, even the most profitable business can rapidly become unsustainable, if cash controls are weak and visibility over cash pipelines is limited,” KPMG Malaysia said.

According to Datuk Johan Idris, who is managing partner of KPMG Malaysia, having a tight grip on cash management will provide companies with valuable breathing space in times of crisis. 

Johan said this is especially true for small businesses, where having cash on hand makes the difference between being operational or foreclosure.

“In these unprecedented circumstances, businesses must be prepared, not only to weather the current storm but also have the capacity to sail safely back to shore once the seas have calmed. 

“Improving cash management is one of the quickest ways for businesses to find some stability during this uncertain time, with an added benefit of reducing debt, funding growth and providing better stakeholder returns.

“This started as a health crisis, which quickly evolved into a global financial crisis at a speed and magnitude we have not seen in our lifetime. Businesses need to anticipate and prepare to manage its ‘cash squeeze’ and competing cash flow demands. 

“Having improved visibility via robust cash management and forecasting procedures, could be the deciding factor on whether the company comes out of this situation intact,” Johan said.

According to the statement, KPMG Malaysia, a limited liability partnership established under Malaysian law, is a member of the KPMG network of independent member firms affiliated with KPMG International Cooperative,which is a Swiss entity. 

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